Category Archives: Telecommunications

“The merits of some mergers make for a close case, but the proposed merger between the mobile carriers Sprint and T-Mobile, which would create a new telecommunications behemoth, is not one of them. Basic economics strongly suggests the proposed combination should be dead on arrival, at least if the nation’s antitrust law still stands for competition and lower prices for consumers. In addition, the recent history of telecommunications and similar industries indicates that allowing consolidation to just three “majors” — Verizon, AT&T and the new T-Mobile (merged with Sprint) — is a terrible idea.

The problem for Sprint and T-Mobile is that they themselves have done such a good job of proving the merits of the four-way competition they now seek to eliminate. In 2011, the government held the line at four competitors by blocking a proposed merger between AT&T and T-Mobile, and it did so again in 2014, when it blocked an effort by Sprint to buy T-Mobile. Result: The “wireless wars” — intense price and service competition that even skeptics of government action concede have been good for consumers and the economy.

T-Mobile, the self-proclaimed “uncarrier,” has done an admirable job of attacking termination fees, abusive contracts and other mistreatment — often outperforming regulators as an agent of consumer protection. Sprint, meanwhile, has come to excel in its role as a price-cutting maverick. Allow me to advertise for Sprint: Did you know that it offers a service for $60 with an unlimited data plan?”

DL; Then Tim Wu describes how consolidation in the Airlines from 6 to 3 carriers has screwed the public. He writes, do you want the cell phone companies to be able to act like these behemoth airlines. They are now very profitable!!